S&P 500 companies set fresh records last week in aggregate forward earnings per share and collective forward profit margin, with the margin rising to 16.1% as the index hovered near 7,500.
Q2 earnings expectations remain unusually strong even after slight analyst trims, with aggregate growth seen at 21.6% year over year and 23.7% on a pro forma basis.
Energy and Information Technology are driving the earnings strength while Health Care lags, and Q3 and Q4 forecasts are also holding at robust levels.
Investors may still face a near-term test because expectations are so elevated that merely meeting them could trigger another July-August pullback, though dip buyers are expected to limit declines.
The report still projects the S&P 500 at 8,250 by year-end, assuming roughly $412.50 in forward earnings at a 20.0 P/E or $400 at a 20.6 multiple.